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Cortadera Overview

A total of 39 diamond drill holes (HQ core) for 23,231m have been completed across a strike extent of approximately 2km at Cortadera since the copper-gold porphyry deposit was first drill tested and discovered in January 2011.

The deposit comprises a cluster of outcropping tonalitic porphyry bodies which have been vertically intruded along a regionally significant NW-trending fault corridor, through a shallowly dipping sequence of intercalated felsic volcaniclastics and sediments. Multiple phases of tonalitic porphyries have been mapped and recognised in diamond core including an early, intermediate and late phase of intrusion.

Drilling across the porphyries recorded strong intersections of copper, gold, molybdenum +/- silver from surface to depths of approximately 900m vertical. Copper and gold show a strong correlation from assay results throughout the deposit with molybdenum generally increasing in grade at depth.

Copper is mainly associated with malachite and chalcocite within the oxide zone and chalcopyrite within the sulphide zone of the deposit. Investigation of detailed logging and surface mapping has demonstrated a close association of vein density and copper grade distribution.

Higher copper grades within the oxide zone are associated with chalcocite, while higher copper grades within the sulphide zone have been related to high molybdenum grades, potentially representing a higher grade phase of mineralisation.

Importantly, the deposit remains open at depth and along strike with several wide, higher grade drilling intersections not closed-off.

While no compliant resource has been estimated at Cortadera, it is considered that minimal work would be required to establish an initial and significant JORC compliant copper-gold-molybdenum Mineral Resource estimate from surface.

The Company considers that the Cortadera deposit has demonstrated potential to host a large copper-gold deposit that the Company considers may be amenable to open pit mining.


Key Terms of the Memorandum of Understanding with Carola
The binding Memorandum of Understanding (MOU) outlines the key commercial terms of an Option Agreement under which Frontera SpA (“Frontera” - 100% subsidiary of Hot Chili) will have the option to acquire a 100% interest in Carola’s Vallenar Mining Rights related to the Cortadera project, on the following terms:
• The purchase price payable to acquire the Cortadera project is US$30 million, payable in three instalments over a 30 month term (“Option Period”) as follows:
a) US$5 million within 6 months from execution of the MOU.
b) US$10 million no later than 18 months from execution of the MoU.
c) US$15 million no later than 30 months from execution of the MoU.
• All instalments of the purchase price during the Option Period shall be non-refundable,
• Upon exercise of the Option, Frontera is not committed to making any subsequent instalment of the purchase price, and may elect not to pay subsequent instalments and relinquish all interest in the Cortadera project,
• The MOU provides for the Option Agreement to be executed within 3 months from the date of the MoU, and
• The Option is subject to legal due diligence and favourable opinion by Frontera, which shall not be unreasonably withheld.